Market Research Report
China Construction Equipment Market - Growth, Trends, and Forecasts (2020 - 2025)
|Published by||Mordor Intelligence Pvt Ltd||Product code||964784|
|Published||Content info||80 Pages
Delivery time: 2-3 business days
|China Construction Equipment Market - Growth, Trends, and Forecasts (2020 - 2025)|
|Published: August 1, 2020||Content info: 80 Pages||
The China Construction Equipment Market is anticipated to register a CAGR of about 4.8% during the forecast period (2020 - 2025).
Growing Demand for Second- Hand Machines
China is one of the largest manufacturing countries and consumers of building construction equipment in the world. However, industry revenue is only expected to rise at an annualized 1.5% over the past five years till 2019. However, although spending in China surpassed the US since 2012, the demand for construction equipment has weakened in China, creating a surplus of unused and used construction equipment.
Low demand from the construction sector in the country has resulted in low profits for significant companies, and small construction equipment has incurred huge losses. The competition in the market has also been fierce, which pushed the major equipment manufacturers to lower the prices of their equipment.
As a result of this, the used equipment is increasingly becoming popular. Used equipment is generally sold in good condition and at significantly cheaper rates. A substantial economic disadvantage in shipping costs, unfavourable exchange rates, and heavy import taxes on new equipment can cost a lot more. This can be a challenge, especially for upcoming business and local players.
The second-hand market also seems to offer much more choice, with the availability of a vast range of machine types, models, and manufacturers - and more options in terms of price. With this, the waiting period between purchasing the equipment and actual delivery can be avoided.
China Growing Investment in The Construction Industry
The world's major construction machinery makers have been setting up manufacturing bases and joint ventures in China. Also, the restrictions on foreign investment in land development, high-end hotels, office buildings, international exhibition centers, and the construction and operation of large theme parks have been lifted. This is expected to increase the demand for construction equipment in the country, thus driving the construction equipment market. Currently, China has been witnessing weak domestic demand for machinery from industries like steel, coal, power, and oil refining. The recovery of these industries is expected to be slow-paced owing to weak external demand and the prevailing protectionism from the overseas market.
The Belt and Road Initiative expected to create increased demand for construction equipment. The Belt and Road Initiative, the flagship project of China, has been a significant demand driver for construction equipment in China. Although all the construction projects are executed overseas, the machinery is purchased and shipped from China as the government offers tax rebates to construction companies that buy the equipment for participating in the Belt and Road Initiative. Kobelco, Tadano, Caterpillar, and Liebherr have been working in increasing their presence in the country, as they anticipate massive demand from the country's flagship Belt and Road Initiative.
The Shanghai Urban Rail transit expansion is valued at the USD 44.23 billion. It includes nine rail projects and six subway lines along with three intercity railways. The project commenced in 2018 and is estimated to be a total of 286km. This network is aimed at creating better connections between Shanghai's two airports and its two major railway stations. In Jiangsu province, eight regional Intercity Railway is being built along the Yangtze River. This is to shorten the commuting time from Nanjing, the capital city of Jiangsu province, to other towns and districts within the area.
As a result, major companies have been establishing manufacturing facilities in different parts of China to capitalize on increasing demand for construction machinery. Although the country's competitive situation is intense, many global players are competing with local construction machinery manufacturers to increase their share in the market.
China Construction Equipment Market is consolidated with existing players such as Kobelco, Tadano, Caterpillar, and Liebherr, who captured the significant market share in 2019. The market is also dominated by local players such as Sany, XCMG, Zoomlion, China Communications Construction Company etc.. Since numerous international and regional players characterize the construction machinery market, construction manufacturers are trying to edge over its competitors by making joint-ventures, partnerships, and launching new products with advanced technology.
In April 2018, XCMG launched a 700-tonne hydraulic excavator, a first in China, which has been equipped with exclusive technologies like high-pressure system intelligent monitoring system and self-diagnosis and dual power assembly coupling control system.